(Rewrites first paragraph, adds CEO comment, shares, analyst)
By Muvija M and Carolyn Cohn
LONDON, Aug 3 (Reuters) - Hefty payouts for sports events
and holidays cancelled due to the coronovirus crisis helped sent
insurer Hiscox deep into the red on Monday and pummelled
its shares to their lowest in more than two months.
The company, which operates on the Lloyd's of London
insurance market, set aside an increased $232 million for claims
stemming from the crisis, including for cancellations of major
events and travel, up from a previous estimate of up to $175
million.
Hiscox did not name the cancelled events but Lloyd's
insurers typically play a large role in insuring major events
like Wimbledon and the Olympics.
"It's been a testing six months," Chief Executive Bronek
Masojada told Reuters, adding that some claims were related to
insurance backing travel company refunds in Britain. "Some of
these companies have gone bust and we are picking up the tab."
The company, which also underwrites a range of risks
including for fine art, classic cars, kidnap and ransom,
reported a pretax loss of $138.9 million for the six months
ended June 30, versus a profit of $168 million a year earlier.
Gross written premiums slipped 4.4% to $2.24 billion, while
its combined ratio - a key measure of profitability - weakened
to 114.6% from 98.8%. A level above 100% indicates an
underwriting loss.
Rivals Beazley and Lancashire also swung to
first-half losses, with insurers facing one of their biggest
claims years due to the pandemic.
Hiscox shares were down 6% at 734.4 pence by 0730 GMT, one
of the biggest losers in the FTSE mid-cap index. They
fell as low as 729.6p, their lowest since late May.
Panmure analysts said the results were mixed but highlighted
that Hiscox has seen a strong rise in premium rates, reiterating
their "buy" rating on the stock.
Hiscox said it would not pay an interim dividend, as
previously announced.
Hiscox is one of eight insurers in a case brought by the
Financial Conduct Authority over disputed business interruption
insurance policy wordings. The court hearing finished last week
and a judgement is expected in mid-September.
Masojada said that if insurers appealed the verdict, they
would likely do so collectively.
(Reporting by Muvija M in Bengaluru and Carolyn Cohn in London
Editing by Ramakrishnan M. and David Holmes)